European Markets Recover After Asian Stocks End Higher

Traders are pictured in front of the German DAX board at the German stock exchange in Frankfurt.

European equities outside Italy inched up in opening trade, after their biggest single day fall in about a year, ahead of an interpretation of German business confidence, and supported by Asian stocks that closed higher and by ECB head Mario Draghi's comments.

Speaking on a visit to London, Draghi said he could see "encouraging signs of tangible improvements" in Britain's economy. He also said that Ireland, Spain and Portugal had made "impressive" improvements in their export performances.

Draghi stressed the need for a banking union that centralises banking operations and regulations across Europe, to tackle the ongoing crisis.

On the debate about the UK's potential exist from the EU, Draghi, in his speech, reminded his audience about the "depth of the interconnection" between Britain and Europe.

"What I can say is that Europe needs a more European UK as much as the UK needs a more British Europe."

Investors in Europe will be tracking a raft of data coming in from Germany. The EU's largest economy reported a 0.1% growth in GDP on a quarter-on-quarter basis.

Investors will be following data coming in from the Gfk German Consumer Climate Index, apart from the German Ifo Business Climate Index that rates the current German business climate and gauges expectations for the next six months.

Data expected from the British Bankers' Association (BBA) will point to the number of new mortgages approved by BBA-backed banks during the previous month.

Earlier in Asia, markets inched up in early trade as the Japanese Nikkei moved up from its biggest single-day drop in two years, supported by a late rally in the US after PC maker Hewlett-Packard forecast an upbeat outlook.

On Wall Street, indices had opened lower on 23 May and then plunged to triple-digit lows, but made up most of the losses by the end of day's trade, owing to a rally in HP's stock, after the world's largest PC maker raised its outlook.